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Building permits increase in Southwest Florida and nation

Published: Wednesday, March 20, 2013 at 1:00 a.m.

Last Modified: Tuesday, March 19, 2013 at 8:51 p.m.

Residential construction's brisk recovery shows no signs of slowing this spring, as new building permit activity across Southwest Florida rose in February.

The increase in building permits, which measures homes expected to begin construction within 90 days, comes as developers rush to eliminate a dire shortage of existing real estate for sale in Sarasota and Manatee counties.

Fanned by cash-rich baby boomers, the uptick in new homes sales also has pushed residential permit activity across the country to its most active pace in more than four years -- all signs of a housing recovery that is swiftly building momentum.

"They're building to contract right now," said Alan Anderson, executive vice president of the Home Builders Association Manatee-Sarasota.

"The majority of these people went in, saw a model and decided to buy. There's a lot of pent-up demand from the baby boomer demographics."

Builders in unincorporated Sarasota County pulled 104 new residential building permits in February, a 60 percent jump from January and a 96 percent surge from the same time last year, according to county records.

That rise was mirrored in Manatee, where developers last month were issued 143 single-family building permits, up 13 percent from January and 77 percent from February 2012.

Builders attribute those gains to retirees who put off home purchases to wait out the Great Recession, but who are now trekking to Florida again.

That migration pushed existing homes sales across Southwest Florida last year to their fourth-highest mark on record.

Coupled with a slowdown in new home defaults, there is only a meager five-months' supply of homes for sale -- a figure that typically connotes a sellers' market.

The combination has lifted the area's median sales price by more than $20,000 over the year which, in turn, bodes well for new-home builders and buyers alike, Anderson said.

The improvements come on the heels of a year in Sarasota-Bradenton when new housing already has outperformed expectations.

The 2,478 subdivision-based new-home starts reported throughout the region last year represented a 30 percent increase from 2011, according to a recent report by Metrostudy Corp. The consulting firm predicts new-home construction will climb another 7 percent to 20 percent locally this year, with even greater gains coming in 2014.

Though analysts say the data represent progress, the industry's turbulent slide means construction velocity today remains well below what would be considered historically balanced.

Because most new homes are being built to a buyer's contract, it will likely take years before developers add enough speculative homes to the market to drastically improve inventory woes, said Tony Polito, Sarasota and Tampa director for Metrostudy.

In Manatee, there is now a 1.1-month supply of vacant, finished inventory in the new-home market, and just a 0.9-month supply in Sarasota. Normally, a healthy market carries about two months' worth, Polito said.

"In the short-term, we're going to be in a bit of a supply pinch," he said.

Perhaps surprisingly, builder confidence ticked down somewhat last month, but that was because of concerns that increased demand for new homes is exceeding supply of raw land, building materials and skilled workers.

U.S. builders broke ground on a seasonally adjusted annual rate of 917,000 homes last month, up nearly 28 percent above estimates of one year ago. New-home starts during the month soared to their second-fastest pace since June 2008, according to data released Tuesday by the U.S. Census Bureau.

Meanwhile, building permits across the country in February also rose about 34 percent over the year.

"We have really started to see things pick up," said Britt Williams, president of area builder Bruce Williams Homes.

"Pre-sales continue to improve over last year, even. Most of this is end-user, second-home and move-up buyers."

<p>Residential construction's brisk recovery shows no signs of slowing this spring, as new building permit activity across Southwest Florida rose in February.</p><p>The increase in building permits, which measures homes expected to begin construction within 90 days, comes as developers rush to eliminate a dire shortage of existing real estate for sale in Sarasota and Manatee counties.</p><p>Fanned by cash-rich baby boomers, the uptick in new homes sales also has pushed residential permit activity across the country to its most active pace in more than four years -- all signs of a housing recovery that is swiftly building momentum.</p><p>"They're building to contract right now," said Alan Anderson, executive vice president of the Home Builders Association Manatee-Sarasota.</p><p>"The majority of these people went in, saw a model and decided to buy. There's a lot of pent-up demand from the baby boomer demographics."</p><p>Builders in unincorporated Sarasota County pulled 104 new residential building permits in February, a 60 percent jump from January and a 96 percent surge from the same time last year, according to county records.</p><p>That rise was mirrored in Manatee, where developers last month were issued 143 single-family building permits, up 13 percent from January and 77 percent from February 2012.</p><p>Builders attribute those gains to retirees who put off home purchases to wait out the Great Recession, but who are now trekking to Florida again.</p><p>That migration pushed existing homes sales across Southwest Florida last year to their fourth-highest mark on record.</p><p>Coupled with a slowdown in new home defaults, there is only a meager five-months' supply of homes for sale -- a figure that typically connotes a sellers' market.</p><p>The combination has lifted the area's median sales price by more than $20,000 over the year which, in turn, bodes well for new-home builders and buyers alike, Anderson said.</p><p>The improvements come on the heels of a year in Sarasota-Bradenton when new housing already has outperformed expectations.</p><p>The 2,478 subdivision-based new-home starts reported throughout the region last year represented a 30 percent increase from 2011, according to a recent report by Metrostudy Corp. The consulting firm predicts new-home construction will climb another 7 percent to 20 percent locally this year, with even greater gains coming in 2014.</p><p>Though analysts say the data represent progress, the industry's turbulent slide means construction velocity today remains well below what would be considered historically balanced.</p><p>Because most new homes are being built to a buyer's contract, it will likely take years before developers add enough speculative homes to the market to drastically improve inventory woes, said Tony Polito, Sarasota and Tampa director for Metrostudy.</p><p>In Manatee, there is now a 1.1-month supply of vacant, finished inventory in the new-home market, and just a 0.9-month supply in Sarasota. Normally, a healthy market carries about two months' worth, Polito said.</p><p>"In the short-term, we're going to be in a bit of a supply pinch," he said.</p><p>Perhaps surprisingly, builder confidence ticked down somewhat last month, but that was because of concerns that increased demand for new homes is exceeding supply of raw land, building materials and skilled workers.</p><p>U.S. builders broke ground on a seasonally adjusted annual rate of 917,000 homes last month, up nearly 28 percent above estimates of one year ago. New-home starts during the month soared to their second-fastest pace since June 2008, according to data released Tuesday by the U.S. Census Bureau.</p><p>Meanwhile, building permits across the country in February also rose about 34 percent over the year.</p><p>"We have really started to see things pick up," said Britt Williams, president of area builder Bruce Williams Homes.</p><p>"Pre-sales continue to improve over last year, even. Most of this is end-user, second-home and move-up buyers."</p>